Stupples, the 36-year-old English star who won the 2004 Women’s British Open, had a 10-under 206 total at Mission Hills in the season’s first major.
First-round leader Suzann Pettersen, who seemingly played herself out of contention with a 73 on Friday, and Yani Tseng shot 67s to reach 9 under.
Top-ranked Lorena Ochoa, who won this tournament two years ago, rebounded from a slow start with birdies on three of her last seven holes for a 71 to join second-round leader Song Hee-Kim (72) at 7 under.
Majors winners Karrie Webb (72), Cristie Kerr (74) and Grace Park (69) also were in the top nine. Webb was alone at 5 under, Kerr was tied with Brittany Lang (69) at 4 under and Park was tied with five others, including Michelle Wie, at 3 under.
Stupples said she was nervous before teeing off, and that her caddie, Jerry Woodard, got in her face and gave her a pep talk.
“I needed that routine,” she said.
Asked if she’ll have a case of the nerves before the final round, she said: “Honestly, I don’t think they can be any worse than they can be this morning. In a way, all it will do is make me get out there and enjoy it. Look who I’ve got chasing me. How could I not enjoy that? That’s called life. That’s fantastic. That’s more exciting than I can even tell.”
Playing with Ochoa, Stupples started strong with four birdies and just one bogey on the front nine to go to 9 under.
Ochoa, who came into the round tied for second, one shot behind Kim, had an uncharacteristically slow start of 2 over on the front nine. She didn’t make her first birdie until the par-14 12th.
Stupples was fired up after rolling in a long birdie putt on the par-3 17th, pumping her left fist four times. Ochoa also birdied No. 17, then birdied the par-5 18th to the delight of the crowd.
Stupples said being paired with the popular Ochoa was “a pretty good atmosphere to play in. It was cool. Very cool.”
Pettersen shot her second 67 of the tournament, with four of her six birdies coming on the back nine.
“It’s going to be a fun day tomorrow,” said Pettersen, the Norwegian star who won the 2007 LPGA Championship. She has two top-10 finishes in three starts this year but also was slowed by a hip injury.
Pettersen has three straight top-five finishes in the tournament.
“I’ve played a lot of good golf around this track,” she said. “Hitting the fairways sets up a lot on this golf course.”